Have Illegals Paid for Iraq?

In response to:

Christopher Jencks’s insightful survey of “The Immigration Charade” [NYR, September 27] points out, among many ironies, that employed illegal aliens who are “on the books” necessarily find their wages withheld under nonexistent or expired Social Security numbers. A portion of these withholdings wind up in retirement accounts, but in the absence of a “matched” Social Security account such monies are posted in so-called “no match” accounts, which in aggregate now hold more than $586 billion, according to Jencks. Not all of this money comes from illegal immigrants, but the Social Security Administration believes that most does.

As is not as widely known as it should be, none of the surpluses held by the SSA are in any sense cash. Instead, they are collected by the Treasury Department, which kindly leaves behind IOUs in the SSA cupboard but then otherwise uses the money to fund federal government operations. In other words, they wind up doing the same thing as the income taxes we all pay except in this case, because ultimately we all will have to repay those IOUs, we will pay them in taxes a second time when it comes time for someone to cover Social Security’s (and Medicare’s, etc.) inevitable deficits.

In the meantime, contributions made by illegals held in “no match” accounts will never be repaid to them in the form of Social Security payments. Since money is fungible and since the Iraq war in round numbers has cost maybe $500 billion, one could say that the illegals have very generously, if involuntarily, financed the whole misadventure.

Jerome W. Anderson

Boston, Massachusetts

Christopher Jencks replies:

Jerome Anderson is quite right that money in “no match” Social Security accounts is paid to the US Treasury, which then gives the Social Security Administration an IOU. The same is true of money paid into other Social Security accounts. While the IOUs for “no match” accounts now add up to a huge sum, that is because they have been accumulating income for decades and thus far they have not had to make any payments.

Anderson is also right that one can think of these “no match” accounts as paying for the war in Iraq, but one can equally well think of them as bankrolling programs that directly benefit immigrants, such as Medicaid.

Whether he is right that none of this money will ever find its way into the pockets of those who earned it is less certain. If Congress were to create a “path to citizenship” for illegal immigrants, it is not inconceivable that it might eventually allow those who became citizens to count the amounts they had paid to the Social Security Administration using other people’s names or numbers when their Social Security retirement benefit is calculated. The politics of immigration is full of surprises.